What should a written Appraisal Review Report communicate about the review’s purpose?
Correct Answer
C) The review’s purpose, including whether it gives the reviewer’s value
SR 3-2(c) requires the reviewer to identify the purpose of the review, including whether the assignment includes developing the reviewer’s own opinion of value or review opinion, and SR 4-2 requires the written Appraisal Review Report to state that purpose along with its other required content. A review opinion about work quality does not automatically imply a separate property value. A fee statement, a blanket replacement of the original value, or silence about the purpose does not meet the reporting requirement.
Why This Is the Correct Answer
Option C is correct because SR 3-2(c) requires the reviewer to identify the purpose of the review, including whether the assignment includes developing the reviewer's own opinion of value or review opinion, and SR 4-2 requires the written Appraisal Review Report to state the purpose of the review. Communicating whether the reviewer gives a value tells users what the review does and does not conclude.
Why the Other Options Are Wrong
Option A: The reviewer’s fee for the assignment and the date on which it was paid
Option A, the reviewer's fee and the date it was paid, does not describe the purpose of the review and is not the required purpose statement.
Option B: That the review replaces the original appraiser’s value opinion
Option B, stating that the review replaces the original appraiser's value opinion, is wrong because a review of work quality does not automatically imply or replace a property value; the purpose must be stated accurately.
Option D: Nothing, as long as the client already knows about the engagement
Option D, saying nothing because the client already knows about the engagement, fails the requirement that the written report state the purpose of the review.
State why you reviewed
A review report says why the review was done and whether the reviewer added a value of their own.
How to use: Use this when asked what an Appraisal Review Report must say about purpose.
Exam Tip
Look for the option that states the purpose and addresses whether the reviewer's own opinion of value is included.
Common Mistakes to Avoid
- -Assuming every review produces a new value that replaces the original
- -Omitting the purpose statement because the client knows it
- -Confusing fee information with required report content
Concept Deep Dive
Analysis
This question tests the reporting requirements for a written Appraisal Review Report. The reviewer must state the purpose of the review, and in development SR 3-2(c) requires identifying whether the assignment includes the reviewer's own opinion of value or review opinion.
Background Knowledge
Standard 3 governs the development of an appraisal review and Standard 4 governs its reporting. Because a review may or may not include the reviewer's own value opinion, stating the purpose prevents users from misreading what the reviewer concluded.
Real-World Application
A reviewer for a lender examines an appraisal for compliance and support but is not asked to give a new value. The review report states that the purpose is to evaluate the quality of the original work and that no reviewer value opinion is developed.
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